Nearing the end of the first half of the year, Conconcreto was recognized as the best construction company with application in technology. The firm was awarded in the Propthech Latin American Awards, an event that seeks to recognize the most innovative and avant-garde companies in LA. Conconcreto is known for being a pioneer in combining the most recent technologies such as 3D printing or BIM modeling in its processes.
Conconcreto is not only recognized as being an innovative company - it also is known for its strong commitment to society. Therefore, in this quarter, the firm joined the expansion strategy of CEmprende, an initiative that seeks to stimulate and strengthen the entrepreneurship and innovation ecosystems in Colombia. The firm’s initiatives are coupled with its solid results. In this semester, the firm showed a significant recovery from last year.
On one hand, income from ordinary activities grew by 19.1 % in comparison to the prior-year semester but, on the other hand, cost sales and operating expenses rose too. Nevertheless, EBITDA has shown a significant improvement, growing 9.7% to COP 65.560 billion, compared to the first two quarters in the previous year.
The firm showed an improvement in the equity method, experiencing an increase of COP 5.921billion which represents an advance of 120.5% in comparison to the last year. The improvement is essentially explained by better results in Conconcretos’s investments and a major tenure of concessions and stake in companies. Likewise, the Other Earnings’ figure improved too, amounting to COP 9.103billion which represents an improvement of 23.4%. The increase is mainly due to higher valuation of PACTIA PCF, higher valuation of investment properties, and better profits in Hedging operations.
The Colombian cement producer also improved in its financial income and financial cost. The former reached a total of COP 34.781bn, reflecting an advance of 39.1% and the latter decreased by COP 11.331, reflecting a reduction of 34.1%. These results are attributable to higher balances of subordinated loans (Equity Projects) and lower balances of debt and rates.
Consolidated net income reached COP 40.914 billion, representing an increase of 84.4% compared to the prior-year semester. This improvement is essentially attributed to the economic recovery in the region.
The strong results are not only found in its income statement; they are also presented in its balance sheet.
As of June 30, 2021, Conconcreto’s total assets ended up at COP 2.97 trillion, which represents an increase of 5.6% compared to the same period last year. Within total current Assets, there was a substantial improvement in Accounts receivable.
Commercial Accounts Receivable grew 13.4% in comparison to the same period last year and Accounts receivable from Related Parties increased by 5.4%. The improvement is mostly explained by the initiation of projects, an increase in deferred income, and the rise in loans destined to new projects.
In the first semester of 2021, Conconcreto`s investment portfolio amounted to COP 1,450,243 million, representing an increase of 5.2% compared to the prior-year semester. Most of the improvement is due to a better performance in ordinary business, greater investment plans, and the impact of the exchange rate.
On the concession business, the company reported an improvement regarding via 40 express and Doble Calzada Oriente concessions, in the former the firm's income and EBITDA grew 103% and 195.5 % respectively, and in the latter 2.1% and 0.4%.
In order to continue with these firm results, Conconcreto has already disclosed its backlog, defined as the amount or value of projects that the firm has in the pipeline on which work has not yet started.
At the end of June, the company’s Backlog closed at COP 2.7 trillion, equal to 4.78 years of volume. While infrastructure projects account for 72.9%, 27.1% corresponds to construction.
Currently, infrastructure has a backlog of COP 1.99 trillion, most of it concentrated in Colombia. On the other hand, construction backlog amounts to COP 740.280 bn, mainly concentrated in Conconcreto USA Projects, such as Midtown Doral, Park Square, Little Haiti, Contra (Housing), and Las Vegas, among others.
The backlog as a whole experienced an increase of 24% compared to the fourth quarter of 2020, but if we consider only the construction backlog, it rose 171.2% compared to 4Q20.
As it can be seen, Conconcreto’s backlog has grown substantially in these few months. Moreover, it is expected to increase even more due to the recovery plan in the United States and the partial recovery in Colombia.
“[…]Today we are already recognized as a Construction Company with experience in South Florida and we are also seeking entry into Infrastructure Construction opportunities with all these incentives that the central Government or the Federal Government of the United States is launching to reactivate the economy, which includes a very high percentage of investment in infrastructure,” stated Juan Luis Aristizábal, Chief Executive Officer.
